MNI BRIEF: New Drivers Fail To Offset China's Slowdown

China's expansionary macro policy has proved less effective in boosting the economy and have not offset the economy's slowdown compared to traditional growth drivers, which have faded, said Wang Yiming, a member of the PBOC monetary policy committee during Global Wealth Management Forum on Thursday.

Chinese GDP will likely grow by over 5% y/y this year thanks to the low base effect, which means the average growth rate over 2022 and 2023 will reach about 4%, much lower than the potential growth rate of 5%-5.5%, Wang said, noting the economy had turned to a medium-speed growth period as the real-estate sector suffers big changes in supply and demand, traditional manufacture increase has peaked and big infrastructural projects have left limited space.

The Chinese economy has seen good momentum but the recovery from the three-year shock of Covid will be complicated, and urbanisation is also slowing down, which is expected to rise to 70% as of the end of 2030 compared with 80%